Indiana and coal

Introduction
Coal production is a major part of the Indiana economy. In 2004, the state produced over 35 million short tons of coal worth an estimated $817 million dollars, which ranked it 8th in the nation in coal production. All Indiana coal is classified as bituminous and contains high sulfur levels, averaging more than 2 percent by weight.

The state consumed over 59 million short tons of coal for electrical power in 2004, producing approximately 95 percent of the electricity generated in Indiana. The state's average retail price of electricity is 6.46 cents per kilowatt hour, the 9th lowest rate in the nation In 2003, Indiana emitted 235 million metric tons of carbon dioxide emissions, ranking it 6th in the nation overall.

In May 2010 the Union of Concerned Scientists released a report titled, Burning Coal, Burning Cash: Ranking the States that Import the Most Coal. In the paper the group reported that Indiana was the ninth most coal dependent state in the country, spending $1.1 billion on coal imports in 2008.

October 2008: Gov. Daniels and proposed Edwardsport plant
On October 28, 2008, three citizen and environmental groups filed a request for public record disclosure to obtain records detailing Governor Daniels' actions in promoting Duke Energy's proposed Edwardsport power plant. The Hoosier Chapter of the Sierra Club, Citizens Action Coalition, and Valley Watch are seeking to determine whether the Daniels administration and the Indiana Utility Regulatory Commission (IURC) violated ratepayer protections in an effort to fasttrack the new plant. The citizen groups want to reveal the level of financial support received from Duke Energy in support of the Governor's energy summit, which was held in Indianapolis two months before the election. The groups are also looking for any evidence of improper communications between Duke and the IURC.

April 2009: Former coal lobbyist appointed to key role for Indiana Department of Environmental Management
In April 2009, David Joest was appointed assistant commissioner for the Office of Legal Counsel of the Indiana Department of Environmental Management (IDEM), which puts him in charge of civil enforcement and criminal investigations of the state's largest polluters. For the last 25 years, Joest has been a registered lobbyist for Peabody Energy, the world's largest coal company. He has fought enviromental agencies and prevented tougher environmental rules in both Indiana and Michigan. In Indiana, he has represented Peabody against the Indiana Department of Natural Resources in legal challenges over permits and defended the company against enforcement from the Indiana DEM. Environmentalists have expressed concern over a conflict of interest, saying that the appointment comes at a time when Peabody Energy is seeking to open new mines in Indiana.

Duke Edwardsport Scandal
In 2006, Duke Energy and Vectren proposed the Edwardsport Plant to be built in Knox County, Indiana, intended to replace two existing oil and coal plants built in the 1940’s, the Edwardsport Generating Station (existing). There is significant opposition to the plant, both because the concentration of coal generators in this area is one of the highest in the world, and because the local power needs have already been met. In May 2008, Duke Energy announced that the new IGCC plant would cost $2.35 billion, an increase of $365 million from earlier estimates. If approved, the overage would be paid for by a 2 percent rate increase between 2008 and 2013.

On January 7, 2009, the Indiana Utility Regulatory Commission approved Duke's request to pass increased construction costs for the plant on to its Indiana customers. The ruling cleared the way for Duke to raise rates by 18 percent over the next five years.

In April 2010, Duke Energy Indiana increased the cost estimate for the Edwardsport coal gasification plant under construction, adding approximately $530 million to the previously approved $2.35 billion cost. Indiana state utility regulators must review and approve Duke Energy Indiana’s filing before any new costs can be phased into customer electric rates. If approved, the increase in costs will add about 3 percent to the project’s customer rate impact, and an overall average 19 percent rate increase by 2013.

In November 2010, state regulators met the first week of November to consider Duke Energy's rate hike request. The plant's cost was then estimated at nearly three billion dollars, twice its original estimate. The Indiana Utility Regulatory Commission (URC) said it will hold a hearing on Nov. 3 in Indianapolis.

Governor Mitch Daniels later fired the URC’s chairman David Lott Hardy for allowing agency official Scott Storms to continue presiding over the Edwardsport case even after talking with Duke about a job opportunity, which Storms took in September 2010.

In December 2010, Duke put former URC official Scott Storms and Mike Reed, the Duke Energy Indiana president who hired him, on administrative leave. Afterward, e-mails obtained by the Indianapolis Star showed that Jim Turner, who headed Duke’s regulated utilities, discussed Storms and Reed with former commission chairman David Lott Hardy, both of whom were dismissed over the ethics issues. Turner and Reed were part of the team that negotiated the settlement with the Indiana Utility Customer Counsel, the Duke Energy Indiana Industrial Group and Nucor Steel Indiana, so Duke Energy withdrew a proposed settlement worked out with with the Indiana customer groups. The company and groups hope to negotiate a new settlement that will not be tainted by the ethics inquiries. On December 6, 2010, James Turner resigned.

Legislative issues
Senate Bill 0423 - The proposed bill to financially secure a coal-to-gas operation in Indiana. The bill would force Indiana taxpayers and residential gas users to financially support and buy gas from a proposed syngas plant operation. The bill was introduced by Majority Whip Brandt Hershman and Majority Caucus Chair James Merrit, Jr.

In February 2010, legislation to grant eminent domain for a carbon dioxide pipeline starting at the proposed Rockport syngas plant and leading to oil fields in Texas cleared the state Senate, and was sent to the House Commerce, Energy, Technology and Utilities Committee. E3 Gasification LLC is working to develop the project, including a pipeline that would run underground from the Rockport plant down to Louisiana and Texas. Coal would be burned in Indiana to produce energy, while the carbon dioxide produced would be captured and then pumped through the pipeline, to be injected into oil fields and used to apply pressure to increase oil production in Texas and Lousiana. The plant has been opposed by the Indianapolis-based Citizens Action Coalition and also Valley Watch (see video), who says that U.S. EPA 2009 Toxic Release Inventory data show that Rockport (population 2068) already has more toxic emissions than Atlanta, NYC, Pittsburgh, Philadelphia, Chicago, Indianapolis, Seattle, Los Angeles, and San Diego combined. And that, despite this, the U.S. Department of Energy is proposing giving a $2.2 billion loan guarantee to build the plant, as part of developing carbon capture and storage technology.

Active

 * Edwardsport Plant

On hold

 * Indiana SNG

Cancelled

 * Crossroads Project
 * Sullivan County Plant

Citizen groups

 * Citizens Action Coalition of Indiana
 * Hoosier Environmental Council
 * Polk & Associates
 * Sierra Club Hoosier Chapter

Coal lobbying groups

 * Indiana Coal Council

Power companies

 * NiSource
 * Headquarters in Merrillville, IN
 * Owner of Northern Indiana Public Service Co.
 * 25th biggest coal energy producer in U.S.
 * Controls 10 coal-fired generating stations with 3470 MW total capacity
 * Hoosier Energy Rural Electric Cooperative
 * Headquarters in Bloomington, IN
 * Controls 4 coal-fired generating stations with 1313 MW total capacity
 * Vectren
 * Headquarters in Evansville, IN
 * Owner of Southern Indiana Gas & Electric
 * Controls 5 coal-fired generating stations with 945 MW total capacity
 * Alcoa
 * Citizens Thermal Energy
 * Crawfordsville Electric Light & Power
 * Indiana-Kentucky Electric Corporation, a division of Ohio Valley Electric Corporation
 * Indiana Michigan Power, a division of American Electric Power
 * Indianapolis Power & Light, a division of AES
 * PSI Energy, a division of Duke Energy
 * State Line Energy, a division of Mirant

Existing coal plants
Indiana is 2nd in the nation in coal power generation, with 90 operating coal-fired power units at 30 locations totaling 21,551 megawatts (MW).

Click on the locations shown on the Indiana map for plant details:

68 of these units are larger than 50MW:
 * A.B. Brown - 530MW - 1979, 1986
 * AES Petersburg - 1881MW - 1967, 1969, 1977, 1986
 * Bailly - 604MW - 1962, 1968
 * Cayuga - 1062MW - 1970, 1972
 * Clifty Creek - 1301MW - 1955, 1956
 * Dean H. Mitchell - 384MW - 1959, 1970
 * Eagle Valley - 396MW - 1953, 1956, 1958
 * Edwardsport - 109MW - 1949, 1951
 * F.B. Culley - 415MW - 1955, 1966, 1973
 * Frank E. Ratts - 233MW - 1970
 * Gibson - 3340MW - 1975, 1976, 1978, 1979, 1982
 * Harding Street - 698MW - 1958, 1961, 1973
 * Merom - 1080MW - 1982, 1983
 * Michigan City - 540MW - 1974
 * R. Gallagher - 600MW - 1958, 1959, 1960, 1961
 * RM Schahfer - 1943MW - 1976, 1979, 1983, 1986
 * Rockport - 2600MW - 1984, 1989
 * State Line - 614MW - 1955, 1962
 * Tanners Creek - 1100MW - 1951, 1952, 1954, 1964
 * Wabash River - 1165MW - 1953, 1954, 1955, 1956, 1968, 1995
 * Warrick - 755MW - 1960, 1964, 1965, 1970

Tanners Creek Plant, Units 1, 2 and 3
On June 9, 2011, AEP announced that, based on impending EPA regulations as proposed, AEP’s compliance plan would retire nearly 6,000 megawatts (MW) of coal-fueled power generation; upgrade or install new advanced emissions reduction equipment on another 10,100 MW; refuel 1,070 MW of coal generation as 932 MW of natural gas capacity; and build 1,220 MW of natural gas-fueled generation.

Included in the plan:
 * Tanners Creek Plant, Lawrenceburg, Indiana - Units 1, 2 and 3 (495 MW) retired by Dec. 31, 2014; Unit 4 (500 MW) would continue to operate with retrofits.

February 2009: Ball State going geothermal
In February 2009, Ball State University's Board of Trustees approved a proposal to phase out the campus's four existing coal-fired boilers and replace them with geothermal energy. The phased conversion will take place over a five to ten year period with a total cost of about $70 million. The university is seeking state approval to use $41.8 million in existing funds, which were originally designated for replacement of the coal-fired boilers, to develop the geothermal system.

May 2009: Duke ordered to shut down three coal-fired units in Indiana
On May 29, 2009, U.S. District Judge Larry J. McKinney ordered Duke Energy to shut down three units of the Wabash River Generating Station for violations of the federal Clean Air Act. In 2008, a jury found that Duke-owned Cinergy had modified the facilities without installing best-available pollution control technology. In his ruling, Judge McKinney cited increased sulfur dioxide emissions from the units and gave a deadline of September 30, 2009 for closing them. Duke's Chief Legal Officer Marc Manly said the company was disappointed with the court's decision to "accelerate the shutdown." The units, which supply 39 percent of the station's power, were slated to be taken off line in 2012.

Dean Mitchell station to close, pollution controls at three other plants
On January 13, 2011, the Obama administration brokered a settlement in which Northern Indiana Public Service Co. will permanently shut down an idled coal-fired power plant in Gary, Indana - the Dean Mitchell Generating Station - and spend $600 million to install and improve pollution controls at the company's three other aging electric generators - Schahfer Generating Station in Wheatfield, Bailly Generating Station in Chesterfield, and the Michigan City Generating Station. NIPSCO faced legal troubles for upgrading the power plants to keep them operating while failing to install modern pollution controls required under the Clean Air Act's New Source Review provisions. The plants avoided the toughest provisions of the law for decades, in part because regulators assumed during the 1970s that they wouldn’t be running much longer.

Coal mines
Click here for a list of coal mines in Indiana.

Peabody to develop Bear Run Mine
On March 17, 2009, Peabody Energy announced it had entered into long-term coal supply agreements totaling over 90 million tons of coal, allowing the company to develop the Bear Run Mine in Sullivan County, Indiana. Bear Run will be the largest surface coal mine in the eastern United States, with an expected output of about 8 million tons of coal each year. Initially the mine will supply coal to two major Midwestern electricity generators under contracts with terms of up to 17 years. Together these contracts are expected to generate nearly $6 billion in revenues. Peabody will invest an estimated $350 to $400 million over several years to bring the mine to its fullest capacity.

Coal Waste
As of 2011, Indiana and Kentucky are the nation's top two states for coal ash ponds, with 53 and 44, respectively.

EPA releases list of 44 "high hazard" coal ash dumps
In response to demands from environmentalists as well as Senator Barbara Boxer (D-California), chair of the Senate Committee on the Environment and Public Works, the EPA made public a list of 44 "high hazard potential" coal waste dumps. The rating applies to sites at which a dam failure would most likely cause loss of human life, but does not include an assessment of the likelihood of such an event. Indiana has one of the sites, which stores coal combustion waste from Tanners Creek Plant and is owned by American Electric Power. To see the full list of sites, see Coal waste.

USGS: Indiana water routinely exceeds "safe" mercury levels
In November 2010, the U.S. Geological Survey, in partnership with the Indiana Department of Environmental Management, published the results of a decade-long study of Indiana waterways, entitled "Mercury in Indiana Watersheds". According to the report: "Mercury contamination in water and fish throughout Indiana has routinely exceeded levels recommended to protect people and wildlife. About 1 in 8 fish samples tested statewide had mercury that exceeded the recommended safety limit for human consumption. The causes include mercury in the rain and mercury going down the drain."

The scientists took 411 water samples from the state's 26 watersheds. They found a median mercury level of 2.32 nanograms per liter, or ng/L, and a maximum of 28.2 ng/L. Compared to Indiana's water-quality criteria for mercury, 59 percent of the water exceeded the 12-ng/L Great Lakes human-health criteria and 72.5 percent exceeded the 1.3-ng/L Great Lakes wildlife criterion. According to the USGS, the most significant source of mercury to Indiana watersheds is fallout from the air. In Indiana, coal-burning power plants emit more mercury to the air each year than any other human activity, the report said.

Report on top state mercury emissions for 2009 rates Indiana fifth
An analysis of federal government data by the environmental advocacy group PennEnvironment showed that Texas, Pennsylvania, Ohio, West Virginia, and Indiana's coal-fired power plants ranked highest in the nation, respectively, for 2009 mercury emissions. According to the report, Pennsylvania's power plants put out more than 15,000 pounds of mercury that year, second only to Texas. Ohio, West Virginia, and Indiana were third, fourth, and fifth.

Study finds dangerous level of hexavalent chromium at Merom waste site
A report released by EarthJustice and the Sierra Club in early February 2011 stated that there are many health threats associated with a toxic cancer-causing chemical found in coal ash waste called hexavalent chromium. The report specifically cited 29 sites in 17 states where the contamination was found. The information was gathered from existing EPA data on coal ash and included locations in Alabama, Arkansas, Delaware, Florida, Illinois, Indiana, Minnesota, Massachusetts, North Carolina, North Dakota, Nevada, Ohio, Oklahoma, Pennsylvania, Tennessee, Virgina and Wisconsin. In Indiana, Hoosier Energy's Merom Generating Station in Sullivan was reported as having high levels of chromium seeping into groundwater from its coal waste landfill.

According to EPA data, hexavalent chromium (Cr(VI)) was reported at the Merom Generating Station All landfill site above 100 ppb (parts per billion) - 5,000 times the proposed California drinking water goals and above the federal drinking water standard.

As a press release about the report read:


 * Hexavalent chromium first made headlines after Erin Brockovich sued Pacific Gas & Electric because of poisoned drinking water from hexavalent chromium. Now new information indicates that the chemical has readily leaked from coal ash sites across the U.S. This is likely the tip of the iceberg because most coal ash dump sites are not adequately monitored.

According to the report, the electric power industry is the leading source of chromium and chromium compounds released into the environment, representing 24 percent of releases by all industries in 2009.

July 2009: Duke files plans for carbon sequestration study in Indiana
In July 2009, Duke Energy filed a proposal for a carbon capture and storage project with the Indiana Utility Regulatory Commission. Duke would invest over $120 million to store a portion of the CO2 emissions from its proposed Edwardsport Plant in Knox County. The three-year project would attempt to store emissions in saline aquifers and in depleted oil and gas fields.

The experiment would result in an average 1 percent rate increase for customers between 2010 and 2013. The company is also applying for a federal grant to cover about half of the project's costs. If the project is successful, Duke will apply to capture and store the emissions on a permanent basis.

Indiana fourth highest in U.S. CO2 emissions
A 2011 report by the Environmental Integrity Project, "Getting Warmer: US CO2 Emissions from Power Plants Emissions Rise 5.6% in 2010" shows that carbon dioxide (CO2) emissions from power plants in the U.S. rose 5.56 percent in 2010 over 2009, the biggest annual increase since the EPA began tracking emissions in 1995. In total, electricity generators released 2.423 billion tons of carbon dioxide in 2010, compared to 2.295 billion tons in 2009. The report is based on data from the EPA’s “Clean Air Markets” website, which tallies emission reports from electric generators.

The 10 worst states for CO2 pollution identified in the report are, in order, Texas, Florida, Ohio, Indiana, Pennsylvania, Illinois, Kentucky, Georgia, Alabama, and Missouri. Texas power plants released nearly 257 million tons of CO2, as much as the next two states - Florida and Ohio - combined, and more than seven times the total CO2 emissions from power plants in California. Texas opened three new coal plants toward the end of 2010, with a combined capacity of 2,156 megawatts.

Coal-fired boilers provided 45 percent of U.S. electricity in 2010, but were responsible for 81 percent of total CO2 emissions from electricity generation in 2010.

Other key report findings include the following:


 * 50 coal-fired power plants accounted for 750 million tons of CO2 emissions in 2010, or about a third of the total. The two largest carbon polluters, the Scherer and Bowen power plants in Georgia, together released more than 48 million tons of CO2 in 2010. By comparison, emissions from all power plants in California were 37.1 million tons; in New York, 40 million tons; and in the six states of New England, 40.5 million tons.
 * Coal-fired generation rose 5.2 percent in the 12 months ending November 30, 2010. Nearly 4.5 gigawatts of new coal-fired electric generation came online in 2010, about half of that in Texas. But power companies have also announced plans to retire almost 12 gigawatts of coal-fired capacity within the next few years, including the announcement in Jan. 2011 that Xcel would close nearly 900 megawatts of coal-fired capacity at four different power stations in Colorado.

Gallagher Plant
Duke Energy's Gallagher Generating Station is located in the Indiana town of New Albany, across the river from Louisville, Kentucky. The majority of the African American population living within a 3 mile radius of the power plant are in an income bracket which is substantially lower than the rest of the community, raising issues around environmental justice and coal. Gallagher is among over 100 coal plants near residential areas.

State Line Plant and Transboundary Pollution
Immediately across from Dominion's State Line Plant in Hammond, Indiana, is Chicago’s East Side neighborhood. The plant is about 12 miles southeast of downtown Chicago, with five schools and several parks within a mile of the plant. The neighborhood surrounding the plant is one of the poorest in Greater Chicago, and one of the major Latino population centers in the city.

Related SourceWatch articles

 * Robert C. Skaggs Jr.
 * Existing U.S. Coal Plants
 * Existing U.S. Coal Mines
 * US proposed coal plants (both active and cancelled)
 * Coal plants cancelled in 2007
 * Coal plants cancelled in 2008
 * EPA Coal Plant Settlements
 * Profiles of other states (or click on the map)